AutoCanada (ACQ) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 6.9% YoY to $1,483.8 million, while net results swung to a $22.6 million loss from $14.8 million income; adjusted EBITDA fell to $46.4 million from $51.0 million.

• New vehicle sales and parts, service and collision repair supported results, offset by weaker used vehicle sales, especially in U.S. Operations, and higher floorplan financing costs.

• Project Elevate, a five-year plan launched in August 2023, is focused on gross profit, cost structure and corporate infrastructure; initial restructuring, training and operational initiatives were underway.

Financial highlights

• Q4 revenue was $1,483.8 million, up 6.9% YoY; gross profit was $257.8 million, up 6.3%, with gross margin of 17.4% versus 17.5%.

• Q4 net loss was $22.6 million versus income of $14.8 million; diluted loss per share was $0.81 versus diluted EPS of $0.52.

• Q4 adjusted EBITDA was $46.4 million versus $51.0 million; adjusted EBITDA margin was 3.1% versus 3.7%.

• Used Digital Division ownership consolidation included $36.7 million of share-based compensation and $1.8 million of transaction costs, reducing diluted EPS by $1.50.

• FY 2023 revenue was $6,436.8 million versus $6,040.6 million; net income was $53.8 million versus $91.1 million.

Outlook and guidance

• Project Elevate is a five-year strategic plan to maximize gross profit, optimize costs and modernize corporate infrastructure; operating expense targets by brand were expected to be implemented in Canada in summer 2024.

• Initiatives underway included U.S. restructuring, best-practice playbooks, training programs and corporate infrastructure modernization projects.

• Maple Ridge GM began operations March 1, 2024, with a dealership and 14-bay service facility; it is the first GM dealership in Metro Vancouver.